Since the credit crunch began, the property market has appeared a very daunting place for first time buyers. The media would have you believe it is impossible for first time buyers to get their foot on the property ladder, however, this is not the case. There are a number of schemes which have been set up to aid first time buyers, none more so than the Shared Equity schemes set up by the Scottish Government.
The Scottish Government is providing useful tools in order to aid those with aspirations to become home owners through their "LIFT" scheme (Low-cost Initiative for First-time Buyers). LIFT offers a number of initiatives to aid First Time Buyers, one of which is the New Shared Supply Equity Scheme. The New Supply Shared Equity scheme aims to help people on low incomes who wish to own their own home but who cannot afford to pay the full price for a house.
In the current climate, deposits for property can be hard to come by, however, shared equity mortgages negate the need for first time buyers to find a deposit. New Supply Shared Equity is administered by the Scottish Government, the City of Edinburgh Council and Glasgow City Council. The scheme works on the basis of the Scottish Government providing a grant to social landlords to help them build or buy new homes for the Shared Equity Scheme, the homes obtained are of a variety of different sizes to meet a range of different needs.
Shared equity mortgages are a great way for first time buyers to buy a property and hold no extra risk to the purchase. The only difference between this scheme and purchasing alone is that on sale the government is due a percentage of the sale price, the percentage will be at the same ratio as the money they invested in the original purchase. For example; if the government puts 20% towards the purchase they will receive 20% of the sale price. It’s really that simply and an excellent alternative for first time buyers who cannot afford to put down a deposit on a property. Furthermore, it is possible for the buyer to increase their stake in the property after two years, up to 80% in all cases and up to 100% in most. There are rare circumstances where an agreement has been struck prior to purchase that the Government is to retain its 20% stake as a "Golden Rule" agreement.
For all those worried about not being able to get their foot on the property ladder, there are means and ways around purchasing a property and the shared equity schemes set up are the simplest way of doing so.
